The court clarified that in a going-concern sale under the Insolvency and Bankruptcy Code, past liabilities are extinguished to protect the successful bidder from unforeseen claims.

ORDER

Per: Bidisha Banerjee, Member (Judicial)

1. This Court congregated through a hybrid mode.

2. Heard the Learned Counsels for both parties.

3. The instant application being I.A. (IB) No. 1243/KB/2024, has been preferred by a Ravindra Ramesh Maloo under section 33(3) read with Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 , for brevity “I&B Code” against the respondent Mr. Sabir Kanti Mazumber seeking the following reliefs:

(a) Consider and allow this IA Rule 11 of NCLT Rules, 2016 ; 2023 in terms of Section 60 (5) read with

(b) Pass appropriate directions for transfer of ownership of the Auction Asset (including the legal entity i.e., HVR Projects Private Limited) to the Applicant, along with certain essential reliefs and concessions as mentioned under Para 16 of the present application;

(c) Direct the Corporate Debtor/ Applicant shall be at liberty in approach this Hon'ble Adjudicating Authority to address any difficulties faced with respect to implementation in taking over of the Corporate Debtor in liquidation;

(d) Grant liberty to the Applicant to amend, alter, modify, delete, rescind and/or substitute any prayer(s); pass any further orders(s) or directions that this Hon'ble Adjudicating Authority may deem fit and proper, Authority

(e) Issue such other orders as the Hon'ble Adjudicating Authority may deem fit.

4. Factual Matrix

4.1 The present Interlocutory Application No. 1243 of 2024 has been filed by Mr. Ravindra Ramesh Maloo, the Successful Bidder, under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016, seeking approval for transfer of ownership of HVR Projects Private Limited as a going concern, along with incidental reliefs and concessions.

4.2 The Company Petition (IB) No. 1681/KB/2018 was admitted by this Adjudicating Authority on 30 October 2019 under Section 9 of the Code on an application filed by Parag Sales Corporation, Operational Creditor, against HVR Projects Private Limited, the Corporate Debtor, for default in payment of an operational debt amounting to ₹7,84,260/- along with interest. Upon admission, a moratorium under Section 14 was imposed and Mr. Sabir Kanti Mazumder was appointed as Interim Resolution Professional.

4.3 Since no resolution plan was approved during the Corporate Insolvency Resolution Process, this Adjudicating Authority, by order dated 04 January 2022, directed commencement of liquidation of the Corporate Debtor under Section 33 (2) of the Code and appointed Mr. Sabir Kanti Mazumder as Liquidator.

4.4 During liquidation, the Liquidator issued an e-auction sale notice dated 21 February 2024, followed by an addendum dated 18 March 2024, fixing the auction date as 17 April 2024 for sale of the Corporate Debtor as a “going concern” in terms of Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016, on “AS IS WHERE IS”, “AS IS WHAT IS”, “WHATEVER THERE IS” and “NO RECOURSE” basis.

4.5 The Applicant deposited earnest money of ₹25,00,000/- on 19 March 2024, participated as the sole bidder in the auction held on 17 April 2024, and offered ₹2,50,00,000/- as the sale consideration. The balance amount of ₹2,25,00,000/- was paid on 02 May 2024. Upon receipt of the full sale consideration, the Liquidator issued a Sale Certificate dated 26 May 2024 in favour of the Applicant, thereby transferring ownership of the Corporate Debtor to him as the sole, legal and beneficial owner on a going concern basis with all rights, titles and entitlements.

4.6 The present application has been filed seeking approval of the said transfer, extinguishment of all liabilities, claims, encumbrances and statutory non-compliances pertaining to the period prior to the transfer date, waiver of penalties